Zimbabwe: Almost Forty, But Unfortified!

Omolola Lipede
20% Complete
 25-Oct-2018

A popular notions says; “life begins at forty”, however, a life that would begin well at forty need to start preparing and planning to begin well. The United Kingdom ceremonially granted Zimbabwe independence on 18 April, 1980. The independence ceremony was held in a stadium in Salisbury, the former capital, many dignitaries (foreign and domestic) attended the great ceremony of freedom from the colonial master. What a happy day it was for Zimbabweans to be a free and control her political and economic institutions, unknown to them, the ship is heading towards an iceberg not at sight at the take-off stage.

Many Africa countries fought for freedom from their colonial masters. They fought with all zeal, hoping for a better economic structure, however, some of the countries headed into economic crisis and disasters. Zimbabwe is also falling apart as hope of surviving is nowhere at sight. Zimbabweans are lamenting on the critical state of the economy daily and helps are not surfacing. This economic crisis is not unfamiliar to the people of the country because economic crisis has become identical to the nation.

Things had begun to fall apart as far back as 1998, in the year there was economic crisis accompanied by riots and strikes in the country. The economic crisis persists in 1990 and in 2001 the Finance Minister, Simba Makoni publicly announced that the nation is in an economic crisis, stating foreign reserves have run out and warning of serious food shortages. In 2002, there was a state of disaster declared as worsening food shortages threaten famine. Also, in 2006, the year-on-year inflation exceeds 1,000 % which led many Zimbabweans to be miserable billionaires in 2008. Have you ever seen the pictures of people using wheel barrows to carry cash to make a purchase? The situation was pathetic. One can just hope the economy doesn’t deteriorate again to that state.

Fast track to 2016, a new national currency called bond notes is introduced as a means of payment which led to what economists call Gresham’s Law. This law is about bad money driving out the good money, the bad money here is the bond notes while the good is the US dollar used as a means of payment before the crisis. As the bond notes were introduced the US dollars became scarcer. So soon, the bond notes became scarce too and the government turned to the printing machine to get more bond notes; the beginning of the disaster. In economics, printing more money might translates to inflation which can be bad for the economy.

The campaign slogan of the new president, Emmerson Mnangagwa was “Zimbabwe is ready for business” but reverse has been the case so far. Almost immediately he was sworn in as president the country begins the struggle to gain grounds in the economic world. In the midst of the campaign, the president visited China and we all hoped for a mutual agreement and a favourably take-home from the visit. China has been the ‘saviour’ of Africa, so, why should Zimbabwe be left out? I asked myself, why would China leave the country to such economic degradation and found out that China is unwillingly to provide the immediate funds needed by Zimbabwe, mentioning concerns over the country’s inability to repay existing debts. If China will not help Zimbabwe, who will?

The economic crisis in the country is alarming and something objective must be carried out, what can it be? Prices of food are increasing incessantly and some are in short supply. It is also very expensive to be sick in the country because prices of medical products are also increasing rapidly.  Many apportioned the cause of the immediate crisis to the introduction of a news tax on electronic transactions, however, the foundation has been shaken.  The new levy was introduced to raise revenue from the large informal sector, but it met the economy unprepared and the ship is at the verge to shipwreck. Zimbabweans live in fear, still haunted by the memories of the 2008 crisis, no one want to go down the lane again; it was miserable.

In 2018, the Permanent Secretary in the office of the president and cabinet, Ambassador Stuart Comberbach said the government is working on a new short-term economic blueprint expected to help stabilise the economy. Zimbabwe is targeting to be a middle-income economy and targets a GDP of over $65 billion. The Ambassador said: “there is a short-term plan the government has been working on for economic stabilisation. This is a two-year plan which is now ready in draft form and will obviously go through consideration by the new cabinet and see to what extent it meets expectations”.

Will the short-term plan take the economy from this struggling stage to a phase of maturity? There are a lot of functions that need to be carried out by the government and the newly elected minister finance, Mthuli Ncube, a former chief economist at the African development bank and a lecturer in finance at the London school of economics. The long-standing problem the government should address in the short-term plan is the debts profile of the country which affects it credits rating and hinders aids from international agencies; at least we know why China withdrew its immediate funds. According to the Zim Bollar index, the debt profile of the country is increasing; domestic debt rose by 72% between June 2017 and June 2018. The country still owes World Bank, AfDB and the Paris Club; who else will the nation borrow from?

Another problem the short-term has to solve is level of productivity, the major sectors in the country before the great fall was mining, agriculture and manufacturing. The country once known as the breadbasket of the continent has become the shadow of itself. All hands should be on deck to revive the productivity level of the country, there must be strategies to make sure the importation bill is reduced to the barest minimum and the economy starts participating in economic activities. Also, the plan has to involve how to woo investors into the country, no one will invest in a country awaiting a great disaster.

More so, it is high time, the country had its. Although, this a long time targets but plans can be made towards achieving this goal. Using other countries’ currency for a longer period of time is like losing one’s identity and above all, Zimbabwe’s economy is expose  to any crisis.  The nation has to work towards its own currency in order to curtail imported economy crisis.

The country is yet to be revived from this disaster if the cost of governance is not reduced, a country involved in more non-economic activities than economic activities is going nowhere to happen. If the cost of governance can be halved, from research it has been found that the economy thrives better provided the amount got is disbursed to more economic activities like human capital development, infrastructure etc. Let’s pause and think, is the ruling government ready for the cut in governance cost? Are the government officials ready to pay the price to have a great nation? Hope they are ready to forfeit the large allowances?

Hope the country is preparing to be ‘fortified’ at forty because 2020 is just around the corner?

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